Allocation procedure

The land readjustment process is an urban land-use planning procedure in which a municipality reorganizes irregular property boundaries within the scope of a zoning plan to facilitate appropriate development and infrastructure. Contributed properties are grouped together within a reallocation area and reorganized by the reallocation authority into newly formed, buildable lots. Owners surrender a portion of their land for development and public purposes and receive, in return, developed lots ready for construction. The procedure thus significantly impacts existing property ownership structures and is subject to strict legal procedural requirements.

Legal Basis and Procedure of the Land Readjustment Process

The land readjustment process is regulated by Sections 45-79 of the German Building Code (BauGB). It begins with the land readjustment resolution issued by the competent municipality, which is publicly announced and covers all affected properties within the readjustment area.

The process is divided into several phases:

1. Initiation: Reallocation resolution, public notice, entry of a reallocation note in the land register for all affected properties (disposal ban).
2. Inventory and Valuation: All properties included in the reallocation are valued-either based on area or value. The value-based approach is more common because it reflects different locations within the readjustment area.
3. Area Deduction: Areas for infrastructure, green spaces, compensation areas, and other public purposes are deducted from the total readjustment pool (typically 20-30%).
4. Allocation: The remaining pool is redistributed according to the value of the contributed properties. Each owner receives a developed, buildable plot with a value corresponding to that of their contributed property.
5. Reallocation Plan: The reallocation plan is made available for public review, and objections may be filed. A legally binding plan concludes the procedure and leads to a transfer of title in the land registry.

Consequences for Landowners

For landowners in the readjustment area, the process has far-reaching consequences. They typically lose a portion of their original land area-usually 20-30%-to the public for roads, green spaces, and utility corridors. The remaining plot is smaller but fully developed and ready for construction: It therefore has a significantly higher specific value (€/m²) than the original, undeveloped raw land.

In practice, this means: Anyone who contributed an agricultural property at raw land prices before the process begins will subsequently receive a developed building lot-the total value has generally increased, even if the area has shrunk.

Cash compensation: Anyone who prefers cash compensation instead of a plot of land may apply for it-however, a legal claim to this exists only in exceptional cases specified by law (§ 59 BauGB), such as when the allocated plot would be unusable for the owner.

Compensation for Additional Burden: If the redistribution results in an unreasonable additional burden (e.g., because the allocated plot is significantly smaller or in a less desirable location), the owner may demand compensation in cash (§ 59(3) BauGB).

Reallocation Proceedings and Real Estate Purchases: What Buyers Need to Know

Anyone purchasing a property that is within the scope of ongoing reallocation proceedings automatically assumes the rights and obligations of the previous owner by law. The reallocation note in the land register indicates the ongoing proceedings-it is important to check this before purchasing.

The purchase price should appropriately reflect the ongoing procedure: A property prior to the completion of the reallocation involves uncertainties regarding the final allocation-the location, size, and layout of the allocable property have not yet been definitively determined. This uncertainty should be reflected in the purchase price.

We recommend that buyers inquire with the relevant urban development office about the current status of the proceedings before purchasing and, to the extent possible, review the land readjustment plan or the preliminary drafts. A lawyer specializing in construction law should assist with drafting the contract to ensure that the risks to both buyer and seller arising from the proceedings are clearly allocated.

Practical Tip for Property Owners in Nuremberg and Franconia

In Nuremberg and the Franconia metropolitan region, land readjustment procedures are primarily carried out in connection with the development of new residential neighborhoods-for example, in southern Nuremberg (Lichtenreuth, former railway grounds) and in outlying areas of growing municipalities such as Feucht, Stein, Schwanstetten, Wendelstein, or in the Knoblauchsland region.

Owners should consult a lawyer specializing in public building law and land readjustment at an early stage to actively represent their interests in the process. Important points:

• The valuation of the contributed property (the basis for allocation) can be challenged.
• The location of the allocated property is negotiable-register your preferences early.
• The reallocation plan can be challenged with an objection within the public comment period; the deadlines must be strictly adhered to.
• Claims for compensation for differences in land value between the contributed and allocated properties are provided for by law but must be actively asserted.

In Nuremberg, the responsible authority is the City Planning Office in cooperation with the Office for City Surveying and Geoinformation. Contact us-if needed, we can connect you with specialized public law attorneys and land readjustment specialists from our network.

Frequently Asked Questions

As a property owner, am I required to participate in a land readjustment?

Yes. The land readjustment procedure is a sovereign procedure; property owners in the readjustment area cannot opt out. They are legally obligated to participate. However, they have procedural rights: They can challenge the readjustment plan, demand an allocation based on fair value, and insist on corrections to the allocation or valuation during the objection proceedings. A passive stance without legal representation often results in claims not being asserted in a timely manner-the consequence is usually a less favorable outcome.

Will I lose land as a result of the land readjustment?

Generally, yes-typically 20-30% of the land contributed is set aside for infrastructure and public green spaces. However, the remaining, developed property has a significantly higher value per square meter (€/m²) because it is ready for development. Whether the total loss of land is economically disadvantageous depends on the initial standard land value and the increase in value resulting from development-in many cases, the increase in value outweighs the loss of land.

How long does a land readjustment procedure take?

Depending on the complexity of the area and the number of parties involved, a land readjustment procedure can take 3 to 10 years. Simple procedures with few parties involved and a clear starting point are completed in 3-5 years; complex urban development areas with many owners, conflicts of use, or legal appeals can take significantly longer. The Nuremberg City Planning Office aims to shorten procedure durations through early public participation-in practice, however, delays due to objections and court proceedings are not uncommon.

What happens to existing land charges and mortgages during the land readjustment?

Existing rights in rem (land charges, mortgages, easements) are transferred to the newly allocated property during the land readjustment process. The owner’s bank is informed of the land readjustment; its rights are preserved. The land registry transfer takes place after the land readjustment plan becomes legally binding without additional real estate transfer tax-the land readjustment itself is exempt from real estate transfer tax (Section 1(1)(3) of the Real Estate Transfer Tax Act).

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